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Sectoral analysis of foreign direct investment and growth in the developed countries

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  • Vu, Tam Bang
  • Noy, Ilan

Abstract

Empirical studies on foreign direct investment (FDI) and growth in developed countries have yielded conflicting results using cross-country regressions. We use sectoral data for a group of six country members of the OECD. Our paper is the first to identify the sector-specific impact of FDI on growth in the developed countries. Our results show that FDI has positive, or no statistically discernible, effect on economic growth directly and through its interaction with labor. Moreover, we find the effects seem to be very different across countries and economic sectors.

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  • Vu, Tam Bang & Noy, Ilan, 2009. "Sectoral analysis of foreign direct investment and growth in the developed countries," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 19(2), pages 402-413, April.
    • Handle: RePEc:eee:intfin:v:19:y:2009:i:2:p:402-413
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    4. Fateh Habibi & Mohammad Sharif Karimi, 2017. "Foreign Direct Investment and Economic Growth: Evidence from Iran and GCC," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 21(3), pages 601-620, Summer.
    5. Serfraz, Ayesha, 2017. "Foreign direct investment inflows and labor productivity in Pakistan: A sector-wise panel cointegration analysis," ZÖSS-Discussion Papers 65, University of Hamburg, Centre for Economic and Sociological Studies (CESS/ZÖSS).
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    8. Ben Slimane, Mehdi & Huchet-Bourdon, Marilyne & Zitouna, Habib, 2016. "The role of sectoral FDI in promoting agricultural production and improving food security," International Economics, Elsevier, vol. 145(C), pages 50-65.
    9. Cabral, René & Castellanos-Sosa, Francisco A., 2019. "Europe's income convergence and the latest global financial crisis," Research in Economics, Elsevier, vol. 73(1), pages 23-34.
    10. Rama, Ruth, 2023. "Technological Transfer Channels of Food and Beverage Processing Multinationals to Host Countries: An Empirical Analysis," MPRA Paper 118162, University Library of Munich, Germany.
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    13. Salebu, Jefry Batara, 2014. "Pengaruh Penanaman Modal Asing Terhadap Pertumbuhan Ekonomi Di Indonesia: Analisis Data Panel Periode 1994-2013 [The Impact of Foreign Direct Investment on Indonesian Economic Growth: Panel Data an," MPRA Paper 72830, University Library of Munich, Germany.
    14. Šimić Vladimir & Malešević-Perović Lena, 2022. "FDI and Economic Growth: A new Look from the Sectoral Perspective," Naše gospodarstvo/Our economy, Sciendo, vol. 68(4), pages 1-11, December.
    15. Ghorashi, Amir Hossein & Maranlou, Hadi, 2021. "Essential infrastructures and relevant policies for renewable energy developments in oil-rich developing countries: Case of Iran," Renewable and Sustainable Energy Reviews, Elsevier, vol. 141(C).
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    17. Ferry Syarifuddin & Maman Setiawan, 2021. "Capital Flow Amid The Covid-19 Pandemic: Cross-Country Contagion Effect Among Asean5 And Projection Of The Impacts For The Indonesian Economy," Working Papers WP/08/2021, Bank Indonesia.
    18. Robert Dekle & Cheng Hsiao & Siyan Wang, 2001. "The Real Effects of Capital Inflows on Emerging Markets," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 4(02), pages 165-202.
    19. Doytch, Nadia & Uctum, Merih, 2019. "Spillovers from foreign direct investment in services: Evidence at sub-sectoral level for the Asia-Pacific," Journal of Asian Economics, Elsevier, vol. 60(C), pages 33-44.
    20. Nadia Doytch, 2021. "Who Gains from Services FDI—Host or Home Economies? An Analysis of Disaggregated Services FDI Inflows and Outflows of 24 European Economies," Foreign Trade Review, , vol. 56(3), pages 257-288, August.
    21. Shimaa Elkomy & Hilary Clistina Ingham & Robert Allan Read, 2018. "Heterogeneous Sectoral Growth Effects of FDI in Egypt," Working Papers 238221684, Lancaster University Management School, Economics Department.
    22. Mostefa BELMOKADDEM & Yassine Zakaria GHOUALI & Mohammed Seghir GUELLIL & Mohammed Abbes SAHRAOUI, 2014. "Causal Interactions Between Fdi, Electricity Consumption And Economic Growth: Evidence From Dynamic Panel Co-Integration Models," Journal of Social and Economic Statistics, Bucharest University of Economic Studies, vol. 3(2), pages 1-30, DECEMBER.
    23. Hilary Ingham & Robert Read & Shimaa Elkomy, 2020. "Aggregate and heterogeneous sectoral growth effects of foreign direct investment in Egypt," Review of Development Economics, Wiley Blackwell, vol. 24(4), pages 1511-1528, November.

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